Fintech Investments

Line To Expand Into Payments, FinTech To Avoid Complacency

Line, the Asian messaging company majority owned by Naver, the South Korean Internet search company, is expanding its business into payments and other FinTech services.

In an interview with the The Financial Times, Shin Jung-ho, the founder of the company said Line is expanding into cashless payments and FinTech in an effort to not remain complacent or stagnant. “My biggest priority is to ensure that the company is in a constant position to deliver innovation,” Shin said in an interview. “As cases in the U.S. and Europe show, the fear is that we will become big and sluggish.”

Line’s messaging app is hugely popular in Japan beyond just communicating. People use it to play games, make payments, find jobs and purchase insurance, reported The Financial Times. As it stands, Line has 164 million monthly active users residing in Japan, Taiwan, Thailand, and Indonesia. During the past year, it has revealed plans to invest in financial services and artificial intelligence. It has forged partnerships with Nomura and Mizuho Financial Group.

According to the report, Line Pay, the company’s mobile payment service, is being leveraged to expand its FinTech services in accordance with Japan’s plan to double cashless payment rates. Line is vowing to make the FinTech business profitable in three years. It’s a goal the paper reported not all investors are on board with. Some are worried that the investment won’t pay off. In 2018 Line posted its first annual loss since its listing in 2016. It had a net loss of $33.5 million for last year. “There are challenges to expanding into new areas like FinTech and payment,” said Shin. “But if users want this and it is an area where we can contribute to improving their lives, we need to take on the challenge even if there are some risks.”

According to Shin, the biggest fear is that Line won’t be able to offer an innovative environment to lure the right talent. As a result, he said a big part of his expanding role is to foster a corporate culture that can survive changes in an industry where it is tiny compared to WhatsApp and WeChat, which both had more than 1 billion active users each month. “What Line is worried about the most is not the lack of resources to hire exceptional people, but whether we can offer the kind of innovative environment for the top talent we have hired to continue taking on challenges,”  Shin said in the report, noting that while Facebook is late to the FinTech party, it is a majority threat. “Considering Facebook’s scale and the number of users, there’s no mistake that they are a formidable competitive threat. But we have spent years trying to understand the needs of our user base, and I am convinced we can offer services that are even more satisfying to our users,” he said.


Latest Insights: 

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The July 2019 Pay Advances: The Gig Economy’s New Normal, a PYMNTS and Mastercard collaboration, examines pay advances – full or partial payments received before an ad hoc job is completed – including how gig workers currently use them and their potential for future adoption.


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